Glassnode’s capitalization of Bitcoin would, according to a shared publication, show a potentially disastrous scenario for the market’s main cryptomone currency, Bitcoin, should the trend continue. In this sense, Bitcoin could experience a drop in price.
Bitcoin may have a drop in price
Despite some large fluctuations, the price of Bitcoin has been surprisingly stable over the past two months, rarely leaving the $9k-10k range.
However, the latest Glassnode „Realized Capitalization“ figures would indicate that Bitcoin may experience a drop in price.
The realized capitalization is a new statistic designed by the Glassnode team. It calculates the size of the market, according to the price that the Bitcoins had in each unique direction of the Blockchain, when they last moved.
In this sense, if we have 1 BTC in our wallet, bought at $7,000, and 2 BTC bought at $8,000, Glassnode adds the $7,000 of the first BTC and the $8,000 of the second, instead of calculating both at the current market price.
„The capitalization made values different parts of the supplies at different prices (instead of using the current daily closing). Specifically, it is calculated by valuing each UTXO at the price of the last time it moved“. In the words of Glassnode.
Consequently, the fact that Bitcoin’s realized capitalization is increasing indicates that many of the BTCs currently on the market have been bought at high prices. That is to say, they have probably been acquired recently.
Now, there are two scenarios: a new record in the realized capitalization of the cryptomoney, may indicate an upward trend in the market. Or the less optimistic scenario.
Well, the previous historical record in the realized capitalization of BTC was reached in early March, just before the 49% drop in the price of Bitcoin due to the Coronavirus crisis. Therefore, there would be no causal relationship between this metric and an increase in the price of cryptoactive.
This could open the door to a drop in Bitcoin’s price.
Bitcoin capitalization indicates a possible drop in price
Changpeng Zhao believes that nothing will be the same after COVID-19
Changpeng Zhao, the CEO of the world’s largest exchange, Binance, said in an interview with Forbes that the world will not be the same after the pandemic that has paralyzed the world, the coronavirus, ends.
In this context, Binance’s CEO believes that after this collapse people will have to be trained. He has also reiterated the role played by Bitcoin and cryptomontages during this crisis.
„The pandemic has changed the world as we know it; it will never be the same. And in this new world, we believe that cryptomonies will play an increasingly important role.
Global Blockchain spending to slow down according to IDC
An IDC report shows that spending on blockchain solutions has declined in all areas by 2020.
According to a report, global blockchain spending will decrease this year. The IDC report goes against the spending forecasts for the current year. This is due to reduced spending on information technology (IT) and a general slowdown in economic growth.
Globally, spending on blockchain solutions is expected to reach $4.3 billion this year. This figure represents a 57.7% increase from 2019 when $2.7 billion was spent.
At the same time, it represents a 7.7% decrease from the pre-COVID-19 predictions. The declines in question will not be uniform but will be manifested in certain sectors and regions.